Court: Disability Plan Participant's Work in Prison
Does Not Disqualify Him

January 20, 2005 (PLANSPONSOR.com) - Reversing a
lower court's ruling, the US 6th Circuit Court of Appeals has
ruled that a long-term disability benefit plan participant
who worked in prison is still eligible for such
benefits.

>Circuit Judge Boyce Martin Jr. ruled that the plan
administrator – Metropolitan Life Insurance Co. – acted
arbitrarily and capriciously in terminating the benefits of
Donald Dover because the inmate’s work in prison did not
indicate that he was able to perform duties of a gainful
occupation, according to BNA.

>Dover, an employee of IBM, began receiving benefits
in 1994 due to a disability, a result of multiple
psychiatric disorders. In May 1997, he was arrested for
writing bad checks, as well as for loan application fraud,
and was sentenced to 78 months in prison. While
incarcerated, Dover was employed for a short time in
the prison’s machine shop and then as a janitor.

>Metropolitan Life informed Dover in 2000 that it was
terminating his benefits retroactive to 1998, when Dover
began working in the prison, citing his employment as
reason for the discontinuation of benefits. When he was
released in May 2001, Dover took the company to court in
the US District Court for the Eastern District of Michigan,
alleging that the company acted unreasonably is terminating
the benefits. The court ruled that the insurance provider
was correct in denying Dover benefits for the time that he
was employed, but awarded him benefits effective May 2001,
the date he was released.

>On appeal, the appeals court reversed the lower
court’s ruling, saying that the termination was not a
rational act. “In our view, Dover’s limited work as an
inmate simply does not indicate that he was able to perform
the duties of a gainful occupation ‘for which [he was]
reasonably fit by [his] education, training, or
experience,’ ” Martin wrote, according to BNA.

“[W]e simply do not think that this type of highly
structured and supervised work in a prison, dramatically
limited by Dover’s continuing treatments for his mental
disability, could rationally by considered sufficient
evidence of an ability to perform the duties of gainful
employment,” Martin added. In its ruling, the court granted
Dover retroactive benefits starting May 1, 1998.

>In her dissenting opinion in the 2-1 case, Judge
Julia Gibbons argued that the only issue before the court
was whether the district court should have retroactively
reinstated the benefits to when Dover was released from
prison.